The Larrabee Tri-Collector Solution 1, a proposal jointly submitted by Mid-Atlantic Offshore Development and Jersey Central Power & Light, was selected Wednesday by the New Jersey Board of Public Utilities as the offshore wind transmission solution for the state.
Those involved called it a historic announcement, both for the state and the offshore wind sector.
It’s also a complicated one.
Here’s an attempt to explain it in a simplistic fashion:
- The decision was historic as the state — using what is called an SAA or state agreement approach — aimed to award one onshore transmission solution that three to four offshore wind farm projects would connect to when they reach land. In addition to being cost-effective, it will limit the impact on the environment.
- Under the order, Mid-Atlantic Offshore Development (or MAOD) will build a new substation and acquire the sufficient land near the existing Larrabee Substation in Howell for the future installation of up to four DC converter stations.
- JCP&L will then transfer the energy collected at the new substation built by MAOD and send it to three other substations, where it will connect the energy to the state’s power grid.
- Unclear at this point is how the energy will get from the Shore to the new converter station. The BPU may offer another solicitation to build a transmission corridor.
MAOD is an LLC that is jointly owned by Shell New Energies US and EDF Renewables North America. The proposal was one of 80 that was submitted (by a total of 13 companies).
The BPU, in a copy of its order, said the joint MAOD/JCP&L proposal made the most sense for a variety of reasons.
“After a thorough evaluation, the Larrabee Tri-Collector Solution and upgrades to the larger PJM transmission grid were determined to best meet New Jersey’s stated SAA goals of reducing community disruption, environmental impacts and customer costs, while minimizing risks,” they wrote.
“Ultimately, the Larrabee Tri-Collector Solution results in an innovative transmission solution, creating a single onshore (point of interconnection) while leveraging existing rights of ways, an outcome that would not have been possible without coordinated planning and a competitive solicitation.”
The BPU said the savings New Jersey ratepayers realize from the selection of these transmission projects is estimated to be over $900 million. In addition, it said the scope of the Larrabee Tri-Collector Solution was tailored to maximize federal tax incentives moving forward, preserving an additional $2.2 billion of ratepayer benefits.
As the state continues to increase its goals for offshore wind energy — and its ability to collect more energy offshore — additional solicitations may be needed, the BPU said.
These solicitations could be for additional onshore transmission projects (connections to other substations, for instance) or for offshore projects where energy collected from numerous wind farms are brought together (the technology is not there to do that just yet).
In the order, the BPU noted that the awarded project also positions the state to seek direct federal funding for future expansions of the offshore wind transmission grid — including the potential to award a full offshore wind backbone in connection with the board’s future offshore wind solicitations — and preserves preferable interconnection locations and transmission corridors for future use.
BPU President Joe Fiordaliso, during the morning meeting, celebrated the moment.
“This may not be equivalent to landing somebody on the moon, but it is certainly an historic event in their progression of offshore wind,” he said.
One that is cost-sensitive, Fiordaliso stressed.
“Today’s action ensures that we’re meeting the state’s offshore goals in the most efficient, responsible, cost-effective manner possible,” he said. “We try to be prudent in our approach. We try to be careful in our approach. And something that takes over a year, I think, is a perfect demonstration of how careful and prudent we are.
“We understand that the ratepayers, you and I, are paying. We understand that, and we take that very seriously.”
Commissioner Bob Gordon said the announcement is a historical moment for the state and the industry.
“I believe the action that we’re about to take is not only groundbreaking, but genuinely historic, because it will set in motion infrastructure investments that will have a transformative impact our state and our nation,” he said. “Throughout our history, other public bodies in meetings such as this one have launched initiatives that led to the development of an interstate highway system, transcontinental railroad, rural electrification and other projects that changed America for the better.
“The creation of the offshore transmission system off the New Jersey coast will have an impact no less significant.”
Gordon summed it up this way.
“Today, with this order, we are selecting cable routes, points of interconnection, sites for new transmission infrastructure and the organizations that will conduct the work,” he said.
“We’re doing something more far-reaching than approving an individual product project. We are implementing decisions that will provide the foundation for the design of an offshore transmission network that I believe will transform the energy sector.
“We’re putting in place the transmission infrastructure that will support further expansion of generating capacity of our coasts. And we’re advancing planning concepts that will minimize the impact on our environment in our ratepayers. “